Course Title: Review the financial structures and processes in international trade

Part B: Course Detail

Teaching Period: Term2 2012

Course Code: MKTG6981

Course Title: Review the financial structures and processes in international trade

School: 650T TAFE Business

Campus: City Campus

Program: C6101 - Advanced Diploma of International Business

Course Contact : Tim Wallis

Course Contact Phone: +61 3 9925 5423

Course Contact

Name and Contact Details of All Other Relevant Staff

Jeffrey Roseman

Nominal Hours: 80

Regardless of the mode of delivery, represent a guide to the relative teaching time and student effort required to successfully achieve a particular competency/module. This may include not only scheduled classes or workplace visits but also the amount of effort required to undertake, evaluate and complete all assessment requirements, including any non-classroom activities.

Pre-requisites and Co-requisites


Course Description

This course generally applies to those with responsibility for international business management and provide leadership in the review of the operating environments of the international banking and non banking finance system.

National Codes, Titles, Elements and Performance Criteria

National Element Code & Title:

VU20068 Review the financial structures and processes in international trade


1. Analyse the operating environments of the international banking and non banking finance systems

2. Analyse ’purchasing power parity’ in relation to foreign exchange reates

3. Review credit risk management strategies for international trade

4. Investigate the application of ’confirmation’, ’factoring’ and ’forfeiting’ to the payment procedures

5.Review ’non-cash’ international trade transactions

Performance Criteria:

1.2 Clearinghouse processes of domestic, international banks and non banking institutions are investigated

1.3 Role of international trade facilitation bodies in the government and private sectors is investigated

1.4 Analysis is conducted to differentiate between conventional "western" banking systems and the systems prevailing in Islamic countries

1.5 Functions and operations otf the Reserve Bank of Australia are compared and evaluated against those of the United States Federal Reserve, The Bank of England and the German Bundesbank

2.1 Benchmarking values of trade weighted baskets and balances of trade between different countries are analysed

2.2 Predominant exchange rate movements for various trading nations are examined and evaluated in relation to the politico-economic trends

2.3 Measurement significance of interest rate differentials to international banks is established

2.4 Application of bank published exchange rate schedules on buying and selling rates for foreign countries is reviewed

2.5 Foreign exchange risk management strategies are identified and reviewed

2.6 Banking is investigated and evaluated against other forms of international trade finance

 3.1 Options for methods of payment are reviewed

3.2 Risk on non-payment is assessed

3.3 Options for payment mechanisms are established

 4.1 Circumstances in which the exporter seeks confirmation are analysed

4.2 Benefits of confirmation are evaluated against credit risk insurance

4.3 Functions of Export Finance Corporation and Trade Indemnity Pty Ltd are reviewed

4.4 Key functions of the Berne Convention for credit insurance are analysed

4.5 Invoice discounting techniques are investigated

 5.1 Analysis is conducted to identify why "non-cash" international trade transactions are investigated

5.2 Viability of identified "non-cash" transactions for an import or export business is investigated and presented to stakeholders

Learning Outcomes

This course covers the knowledge and skills required to analyse international trade finance variables within Australia and in a global context. It includes examining the structures and processes of financing international import and export transactions in the banking system, including optional finance models and practices that are available to international businesses.

Details of Learning Activities

A range of learning activities are planned for this course including self-paced and collaborative class room based activities.

The self-based activities will be delivered through various technology platforms and will include student contribution to wikis and discussion threads, reflective journals, quizzes and interactive sessions.

The collaborative classroom based activities will include group discussion, group problem solving activities and opportunities to practice skills in a simulated workplace environment.

Teaching Schedule

Week and Detail

0.Historical development of the international monetary system

1. The Gold Standard and Bretton Woods

2. Bretton Woods and the post WWII era

3. Free Floating/Variable/Flexible Exchange Rates

4. Factors that influence Exchange Rate movements

5. Student Study Week

6. Risk Identification and Management

7. Internal Hedging techniques

8. Money market hedging techniques

Mid Semester Break

9. Revision weeks one to eight

10. Methods of payment for Imports and Exports

11. Major risks associated with Payment of Trade

12. Trade Finace and Countertrade

13. The Operating Environment

14. The Operating Environment continued

15 Revision weeks nine to 14

16. Final Test

17.Feedback and individual feedback

Learning Resources

Prescribed Texts

There is no prescribed text but students are encouraged to download the book entitled "Finance of International Trade" published by the National Bank and available from the following website:


Recommended readings Viney,C,McGrath's Financial Institutions, Instruments and Markets, Irwin McGraw Hill 3rd ed Brown, A, et al, International Banking and Finance, Serendip Publications

Other Resources

Overview of Assessment

Students must demonstrate an understanding of all elements of a particular competency to be deemed competent. Assessment methods have been designed to measure achievement of each competency in a flexible manner over a range of assessment tasks.

Assessment will incorporate a variety of methods including assignments, journals, presentation and written or test. Students are advised that they are likely to be asked to personally demonstrate their assessment work to their teacher to ensure that the relevant competency standards are being met.

Assessment Tasks

 The assessment will consist of:

1. Assignment - a research project where the student will use technical analysis techniques to trade foreign currencies

2. Assignment - an individual research assignment where students will conduct researc into major financial institutions

3. Closed book Examination - will comprise multiple choice, case studies and short answer questions. As such it will assess underpinning knowledge and skills, covered in the course and the performance criteria.

Critical aspects of assessment

The critical aspects of assessment are:
• Validity – the assessment tool is designed and implemented so that it measures performance accurately and precisely
• Reliability – the assessment tool is designed and implemented so that the measurements received are consistent over a period of time or a number of assessment events
• Fairness – the assessment tool is designed and implemented so that it is non-discriminatory and unambiguous
• Flexibility – the assessment tool is designed to allow for its application in a range of different contexts and conditions, and uses a range of methodologies.

Assessment may incorporate a variety of methods including in-class exercises, problem-solving exercises, assignments, group or individual projects, presentations and written or practical tests, as well as homework activities.

Other activities may be workplace-based or simulate work practices. These may include the production of technical requirements documents, direct observation of workplace practices and the presentation of a portfolio of evidence. This portfolio may include documents, photographs, video and/or audio files.

Students are advised that they are likely to be asked to personally demonstrate their assessment work to their teacher to ensure that the relevant competency standards are being met. Students will be provided with feedback throughout the course to check their progress.

Assessment Matrix

Other Information

Graded Assessment at RMIT
At RMIT, the grades to be used for VET programs are:
DNS - Did not submit for assessment
NYC - Not yet competent
CAG - Competency achieved – graded
CC - Competent with credit
CDI - Competent with distinction
CHD - Competent with high distinction

Course Overview: Access Course Overview